Form 10-Q

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2012

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 814-00733

Triangle Capital Corporation

(Exact name of registrant as specified in its charter)


Maryland		06-1798488
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

3700 Glenwood Avenue, Suite 530 Raleigh, North Carolina		27612
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (919) 719-4770

Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report: N/A

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

The number of shares outstanding of the registrant’s Common Stock on May 2, 2012 was 27,263,151.

TRIANGLE CAPITAL CORPORATION

TABLE OF CONTENTS

QUARTERLY REPORT ON FORM 10-Q


		Page

PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements
	Unaudited Consolidated Balance Sheet as of March 31, 2012 and Consolidated Balance Sheet as of December 31, 2011		3
	Unaudited Consolidated Statements of Operations for the Three Months Ended March 31, 2012 and 2011		4
	Unaudited Consolidated Statements of Changes in Net Assets for the Three Months Ended March 31, 2012 and 2011		5
	Unaudited Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2012 and 2011		6
	Unaudited Consolidated Schedule of Investments as of March 31, 2012		7
	Consolidated Schedule of Investments as of December 31, 2011		12
	Notes to Unaudited Consolidated Financial Statements		17
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		28
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		38
Item 4.	Controls and Procedures		39

PART II – OTHER INFORMATION
Item 1.	Legal Proceedings		39
Item 1A.	Risk Factors		39
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		39
Item 3.	Defaults Upon Senior Securities		40
Item 4.	Mine Safety Disclosures		40
Item 5.	Other Information		40
Item 6.	Exhibits		40
Signatures			42
Exhibits

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

TRIANGLE CAPITAL CORPORATION

Consolidated Balance Sheets


	March 31,		December 31,
	2012		2011
	(Unaudited)
Assets
Investments at fair value:
Non–Control / Non–Affiliate investments (cost of $424,962,392 and $389,312,451 at March 31, 2012 and December 31, 2011, respectively)	$	436,419,052	$	396,502,490
Affiliate investments (cost of $98,502,634 and $97,751,264 at March 31, 2012 and December 31, 2011, respectively)		101,197,149		103,266,298
Control investments (cost of $11,464,968 and $11,278,339 at March 31, 2012 and December 31, 2011, respectively)		6,818,996		7,309,787

Total investments at fair value		544,435,197		507,078,575
Cash and cash equivalents		142,514,158		66,868,340
Interest and fees receivable		2,745,074		1,883,395
Prepaid expenses and other current assets		470,126		623,318
Deferred financing fees		8,485,166		6,682,889
Property and equipment, net		60,611		58,304


Total assets	$	698,710,332	$	583,194,821


Liabilities
Accounts payable and accrued liabilities	$	1,510,224	$	4,116,822
Interest payable		1,205,864		3,521,932
Taxes payable		203,893		1,402,866
Deferred income taxes		775,953		628,742
Borrowings under credit facility		—		15,000,000
Senior notes		69,000,000		—
SBA-guaranteed debentures payable		213,871,133		224,237,504


Total liabilities		286,567,067		248,907,866

Net Assets
Common stock, $0.001 par value per share (150,000,000 shares authorized, 27,263,151 and 22,774,726 shares issued and outstanding as of March 31, 2012 and December 31, 2011, respectively)		27,263		22,775
Additional paid-in-capital		396,320,487		318,297,269
Investment income in excess of distributions		6,054,619		6,847,486
Accumulated realized gains on investments		1,011,649		1,011,649
Net unrealized appreciation of investments		8,729,247		8,107,776


Total net assets		412,143,265		334,286,955


Total liabilities and net assets	$	698,710,332	$	583,194,821


Net asset value per share	$	15.12	$	14.68

See accompanying notes.

TRIANGLE CAPITAL CORPORATION

Unaudited Consolidated Statements of Operations


	Three Months Ended			Three Months Ended
	March 31, 2012			March 31, 2011
Investment income:
Loan interest, fee and dividend income:
Non–Control / Non–Affiliate investments	$	12,963,602		$	8,749,449
Affiliate investments		2,717,149			1,374,243
Control investments		59,773			258,268

Total loan interest, fee and dividend income		15,740,524			10,381,960

Paid–in–kind interest income:
Non–Control / Non–Affiliate investments		2,587,267			1,481,820
Affiliate investments		654,233			395,171
Control investments		19,971			65,297

Total paid–in–kind interest income		3,261,471			1,942,288
Interest income from cash and cash equivalent investments		109,858			101,149


Total investment income		19,111,853			12,425,397


Expenses:
Interest and credit facility fees		3,087,820			1,989,984
Amortization of deferred financing fees		222,917			152,173
General and administrative expenses		3,607,267			2,397,523


Total expenses		6,918,004			4,539,680


Net investment income		12,193,849			7,885,717

Net unrealized appreciation of investments		621,471			4,595,755

Total net gain on investments before income taxes		621,471			4,595,755
Loss on extinguishment of debt		(205,043	)		(157,590	)
Income tax benefit		7,231			27,359


Net increase in net assets resulting from operations	$	12,617,508		$	12,351,241


Net investment income per share—basic and diluted	$	0.49		$	0.47

Net increase in net assets resulting from operations per share—basic and diluted	$	0.50		$	0.73

Dividends declared per common share	$	0.47		$	0.42

Weighted average number of shares outstanding—basic and diluted		25,075,300			16,848,570

See accompanying notes.

TRIANGLE CAPITAL CORPORATION

Unaudited Consolidated Statements of Changes in Net Assets


										Investment			Accumulated			Net
										Income			Realized			Unrealized
	Common Stock						Additional			in Excess of			Gains			Appreciation		Total
	Number			Par			Paid In			(Less Than)			(Losses) on			(Depreciation)		Net
	of Shares			Value			Capital			Distributions			Investments			of Investments		Assets

Balance, January 1, 2011		14,928,987		$	14,929		$	183,602,755		$	3,365,548		$	(8,244,376	)	$	1,740,303	$	180,479,159
Net investment income		—			—			—			7,885,717			—			—		7,885,717
Stock-based compensation		—			—			414,329			—			—			—		414,329
Net unrealized gains on investments		—			—			—			—			—			4,595,755		4,595,755
Loss on extinguishment of debt		—			—			—			(157,590	)		—			—		(157,590	)
Income tax benefit		—			—			—			27,359			—			—		27,359
Dividends/distributions declared		61,766			62			1,094,444			(7,773,397	)		—			—		(6,678,891	)
Public offering of common stock		3,450,000			3,450			63,134,805			—			—			—		63,138,255
Issuance of restricted stock		152,779			153			(153	)		—			—			—		—
Common stock withheld for payroll taxes upon vesting of restricted stock		(23,676	)		(24	)		(485,571	)		—			—			—		(485,595	)

Balance, March 31, 2011		18,569,856		$	18,570		$	247,760,609		$	3,347,637		$	(8,244,376	)	$	6,336,058	$	249,218,498


										Investment			Accumulated		Net
										Income			Realized		Unrealized
	Common Stock						Additional			in Excess of			Gains		Appreciation		Total
	Number			Par			Paid In			(Less Than)			(Losses) on		(Depreciation)		Net
	of Shares			Value			Capital			Distributions			Investments		of Investments		Assets

Balance, January 1, 2012		22,774,726		$	22,775		$	318,297,269		$	6,847,486		$	1,011,649	$	8,107,776	$	334,286,955
Net investment income		—			—			—			12,193,849			—		—		12,193,849
Stock-based compensation		—			—			648,750			—			—		—		648,750
Net unrealized gains on investments		—			—			—			—			—		621,471		621,471
Loss on extinguishment of debt		—			—			—			(205,043	)		—		—		(205,043	)
Income tax benefit		—			—			—			7,231			—		—		7,231
Dividends/distributions declared		52,717			52			1,028,467			(12,788,904	)		—		—		(11,760,385	)
Public offering of common stock		4,255,000			4,255			77,243,819			—			—		—		77,248,074
Issuance of restricted stock		227,631			228			(228	)		—			—		—		—
Common stock withheld for payroll taxes upon vesting of restricted stock		(46,923	)		(47	)		(897,590	)		—			—		—		(897,637	)

Balance, March 31, 2012		27,263,151		$	27,263		$	396,320,487		$	6,054,619		$	1,011,649	$	8,729,247	$	412,143,265

See accompanying notes.

TRIANGLE CAPITAL CORPORATION

Unaudited Consolidated Statements of Cash Flows


	Three Months Ended March 31, 2012			Three Months Ended March 31, 2011

Cash flows from operating activities:
Net increase in net assets resulting from operations	$	12,617,508		$	12,351,241
Adjustments to reconcile net increase in net assets resulting from operations to net cash used in operating activities:
Purchases of portfolio investments		(41,952,989	)		(68,275,512	)
Repayments received/sales of portfolio investments		8,253,844			14,936,864
Loan origination and other fees received		666,420			1,466,292
Net unrealized appreciation of investments		(768,682	)		(4,789,955	)
Deferred income taxes		147,211			194,200
Payment–in–kind interest accrued, net of payments received		(2,704,362	)		(857,493	)
Amortization of deferred financing fees		222,917			152,173
Loss on extinguishment of debt		205,043			157,590
Accretion of loan origination and other fees		(476,512	)		(415,247	)
Accretion of loan discounts		(374,341	)		(260,986	)
Accretion of discount on SBA-guaranteed debentures payable		43,629			42,378
Depreciation expense		7,349			7,064
Stock-based compensation		648,750			414,329
Changes in operating assets and liabilities:
Interest and fees receivable		(861,679	)		(532,986	)
Prepaid expenses		153,192			(218,943	)
Accounts payable and accrued liabilities		(2,606,598	)		(1,341,160	)
Interest payable		(2,316,068	)		(1,774,828	)
Deferred revenue		—			5,287
Taxes payable		(1,198,973	)		(191,672	)

Net cash used in operating activities		(30,294,341	)		(48,931,364	)


Cash flows from investing activities:
Purchases of property and equipment		(9,656	)		(18,115	)

Net cash used in investing activities		(9,656	)		(18,115	)


Cash flows from financing activities:
Borrowings under SBA-guaranteed debentures payable		—			21,600,000
Repayments of SBA-guaranteed debentures payable		(10,410,000	)		(9,500,000	)
Repayments of credit facility		(15,000,000	)		—
Proceeds from senior notes		69,000,000			—
Financing fees paid		(2,230,237	)		(523,801	)
Proceeds from public stock offerings, net of expenses		77,248,074			63,138,255
Common stock withheld for payroll taxes upon vesting of restricted stock		(897,637	)		(485,595	)
Cash dividends paid		(11,760,385	)		(6,678,891	)

Net cash provided by financing activities		105,949,815			67,549,968

Net increase in cash and cash equivalents		75,645,818			18,600,489
Cash and cash equivalents, beginning of period		66,868,340			54,820,222

Cash and cash equivalents, end of period	$	142,514,158		$	73,420,711


Supplemental disclosure of cash flow information:
Cash paid for interest	$	5,289,789		$	3,722,434

See accompanying notes.

TRIANGLE CAPITAL CORPORATION

Unaudited Consolidated Schedule of Investments

March 31, 2012


Portfolio Company	Industry	Type of Investment⁽¹⁾⁽²⁾	Principal Amount		Cost		Fair Value⁽³⁾
*Non–Control / Non–Affiliate Investments:*
Ambient Air Corporation (“AA”) and Peaden-Hobbs Mechanical, LLC (“PHM”) (1%)*	Specialty Trade Contractors	Subordinated Note-AA (15% Cash, 3% PIK, Due 06/13)	$	4,159,154	$	4,138,386	$	4,138,386
		Subordinated Note-PHM (12% Cash, Due 09/12)		12,857		12,857		12,857
		Common Stock-PHM (128,571 shares)				128,571		128,571
		Common Stock Warrants-AA (455 shares)				142,361		841,000

				4,172,011		4,422,175		5,120,814

Ann’s House of Nuts, Inc. (3%)*	Trail Mixes and Nut Producers	Subordinated Note (12% Cash, 1% PIK, Due 11/17)		7,098,742		6,745,782		6,745,782
		Preferred A Units (22,368 units)				2,124,957		2,400,000
		Preferred B Units (10,380 units)				986,059		1,244,000
		Common Units (190,935 units)				150,000		—
		Common Stock Warrants (14,558 shares)				14,558		—

				7,098,842		10,021,356		10,389,782

Aramsco, Inc. (0%)	Environmental Emergency Preparedness Products Distributor	Subordinated Note (12% Cash, 2% PIK, Due 03/14)		1,747,290		1,632,143		1,632,143
Aramsco, Inc. (0%)
				1,747,290		1,632,143		1,632,143

Assurance Operations Corporation (0%)*	Metal Fabrication	Common Stock (517 Shares)				516,867		798,000
Assurance Operations Corporation (0%)*	Metal Fabrication
						516,867		798,000

BioSan Laboratories, Inc. (1%)*	Nutritional Supplement Manufacturing and Distribution	Subordinated Note (12% Cash, 3.8% PIK, Due 10/16)		5,326,311		5,233,287		5,233,287
BioSan Laboratories, Inc. (1%)*
				5,326,311		5,233,287		5,233,287

Botanical Laboratories, Inc. (2%)*	Nutritional Supplement Manufacturing and Distribution	Senior Notes (14% Cash, 1% PIK, Due 02/15)		9,887,499		9,386,329		9,386,329
	Nutritional Supplement Manufacturing and Distribution	Common Unit Warrants (998,680 Units)				474,600		—

				9,887,499		9,860,929		9,386,329

Capital Contractors, Inc. (2%)*	Janitorial and Facilities Maintenance Services	Subordinated Notes (12% Cash, 2% PIK, Due 12/15)		9,231,740		8,692,515		8,692,515
	Janitorial and Facilities Maintenance Services	Common Stock Warrants (20 shares)				492,000		406,000

				9,231,740		9,184,515		9,098,515

Carolina Beverage Group, LLC (3%)*	Beverage	Subordinated Note (12% Cash, 4% PIK, Due
	Manufacturing and Packaging	02/16)		13,394,977		13,200,222		13,200,222
	Manufacturing and Packaging	Class A Units (11,974 Units)				1,077,615		1,193,000
		Class B Units (11,974 Units)				119,735		—

				13,394,977		14,397,572		14,393,222

Continental Anesthesia Management, LLC (2%)*	Physicians	Senior Note (13.5% Cash, Due 11/14)		10,200,000		9,917,463		9,917,463
	Management
	Services	Warrant (263 shares)				276,100		115,000

				10,200,000		10,193,563		10,032,463

CRS Reprocessing, LLC (6%)*	Fluid Reprocessing Services	Subordinated Note (12% Cash, 2% PIK, Due 11/15)		11,414,774		11,103,141		11,103,141
		Subordinated Note (12% Cash, 2% PIK, Due 11/15)		11,072,372		10,126,929		10,126,929
		Series C Preferred Units (26 Units)				288,342		463,000
		Common Unit Warrant (550 Units)				1,253,556		4,065,000

				22,487,146		22,771,968		25,758,070

CV Holdings, LLC (4%)*	Specialty	Subordinated Note (12% Cash, 4% PIK, Due
	Healthcare	09/13)		9,373,192		8,996,545		8,996,545
	Products	Subordinated Note (12% Cash, Due 09/13)		6,000,000		5,923,793		5,923,793
	Manufacturer	Royalty rights				874,400		832,000

				15,373,192		15,794,738		15,752,338

DLR Restaurants, LLC (3%)*	Restaurant	Subordinated Note (12% Cash, 3% PIK, Due 03/16)		10,741,488		10,538,856		10,538,856
		Subordinated Note (12% Cash, 4% PIK, Due 03/16)		759,713		759,713		759,713
		Royalty rights				—		—

				11,501,201		11,298,569		11,298,569

Electronic Systems Protection, Inc. (1%)*	Power Protection Systems Manufacturing	Subordinated Note (12% Cash, 2% PIK, Due 12/15)		4,183,612		4,150,879		4,150,879
	Power Protection Systems Manufacturing	Common Stock (570 shares)				285,000		369,000

				4,183,612		4,435,879		4,519,879

Frozen Specialties, Inc. (2%)*	Frozen Foods Manufacturer	Subordinated Note (13% Cash, 5% PIK, Due 07/14)		8,586,345		8,506,946		8,506,946
Frozen Specialties, Inc. (2%)*
				8,586,345		8,506,946		8,506,946

TRIANGLE CAPITAL CORPORATION

Unaudited Consolidated Schedule of Investments

March 31, 2012


Portfolio Company	Industry	Type of Investment⁽¹⁾⁽²⁾	Principal Amount		Cost		Fair Value⁽³⁾

Garden Fresh Restaurant Corp. (0%)*	Restaurant	Membership Units (5,000 units)			$	500,000	$	740,000

						500,000		740,000

Grindmaster-Cecilware Corp. (1%)*	Food Services Equipment Manufacturer	Subordinated Note (12% Cash, 6% PIK, Due 04/16)		6,369,993		6,298,897		5,529,000

				6,369,993		6,298,897		5,529,000

Hatch Chile Co., LLC (1%)*	Food Products Distributor	Senior Note (19% Cash, Due 07/15)		4,500,000		4,415,726		4,415,726
		Subordinated Note (14% Cash, Due 07/15)		1,000,000		873,286		873,286
		Unit Purchase Warrant (5,265 Units)				149,800		267,000

				5,500,000		5,438,812		5,556,012

Home Physicians, LLC (“HP”) and Home Physicians Holdings, LP (“HPH”) (2%)*	In-home primary care physician services	Subordinated Note—HP (12% Cash, 5% PIK, Due 03/16)		10,789,319		10,599,352		9,300,000
		Subordinated Note—HPH (4% Cash, 6% PIK, Due 03/16)		1,303,361		1,303,361		—
		Subordinated Note—HP (14% Cash, 2% PIK, Due 3/16)		602,970		591,498		591,498
		Royalty rights				—		—

				12,695,650		12,494,211		9,891,498

Infrastructure Corporation of America, Inc. (3%)*	Roadway Maintenance, Repair and Engineering Services	Subordinated Note (12% Cash, 1% PIK, Due 10/15)		10,906,338		9,958,194		9,958,194
		Common Stock Purchase Warrant (199,526 shares)				980,000		1,255,000

				10,906,338		10,938,194		11,213,194

Inland Pipe Rehabilitation Holding Company LLC (5%)*	Cleaning and Repair Services	Subordinated Note (13% Cash, 2.5% PIK, Due 12/16)		20,405,615		20,135,203		20,135,203
		Membership Interest Purchase Warrant (3.0%)				853,500		2,198,000

				20,405,615		20,988,703		22,333,203

Library Systems & Services, LLC (1%)*	Municipal Business Services	Subordinated Note (12.5% Cash, 4.5% PIK, Due 06/15)		5,309,720		5,196,733		5,196,733
		Common Stock Warrants (112 shares)				58,995		771,000

				5,309,720		5,255,728		5,967,733

Magpul Industries Corp. (4%)	Firearm Accessories Manufacturer and Distributor	Subordinated Note (12% Cash, 3% PIK, Due 03/17)		13,300,000		13,051,683		13,051,683
		Preferred Units (1,470 Units)				1,470,000		1,583,000
		Common Units (30,000 Units)				30,000		1,050,000

				13,300,000		14,551,683		15,684,683

Media Storm, LLC (2%)*	Marketing Services	Subordinated Note (12% Cash, 2% PIK, Due 10/17)		8,574,772		8,494,784		8,494,784
		Membership Units (1,216,204 Units)				1,216,204		1,216,204

				8,574,772		9,710,988		9,710,988

Media Temple, Inc. (4%)*	Web Hosting Services	Subordinated Note (12% Cash, 5.5% PIK, Due 04/15)		8,800,000		8,667,526		8,667,526
		Convertible Note (8% Cash, 6% PIK, Due 04/15)		3,200,000		2,806,774		5,099,000
		Common Stock Purchase Warrant (28,000 Shares)				536,000		2,231,000

				12,000,000		12,010,300		15,997,526

Minco Technology Labs, LLC (1%)*	Semiconductor Distribution	Subordinated Note (13% Cash, 3.25% PIK, Due 05/16)		5,315,744		5,217,911		5,217,911
		Class A Units (5,000 Units)				500,000		83,000

				5,315,744		5,717,911		5,300,911

National Investment Managers Inc. (3%)*	Retirement Plan Administrator	Subordinated Note (11% Cash, 5% PIK, Due 09/16)		11,850,947		11,609,186		11,609,186
		Preferred A Units (90,000 Units)				900,000		479,000
		Common Units (10,000 Units)				100,000		—

				11,850,947		12,609,186		12,088,186

Novolyte Technologies, Inc. (3%)*	Specialty Manufacturing	Subordinated Note (12% Cash, 4% PIK, Due 07/16)		7,337,631		7,221,971		7,221,971
		Subordinated Note (12% Cash, 4% PIK, Due 07/16)		2,358,525		2,321,349		2,321,349
		Preferred Units (641 units)				661,227		874,000
		Common Units (24,522 units)				165,306		2,198,000

				9,696,156		10,369,853		12,615,320

Pomeroy IT Solutions (2%)*	Information Technology Outsourcing Services	Subordinated Notes (13% Cash, 2% PIK, Due 02/16)		10,232,670		10,017,621		10,017,621

				10,232,670		10,017,621		10,017,621

PowerDirect Marketing, LLC (2%)*	Marketing Services	Subordinated Note (12% Cash, 2% PIK, Due 05/16)		8,142,017		7,643,193		7,643,193
		Common Unit Purchase Warrants				402,000		736,000

				8,142,017		8,045,193		8,379,193

TRIANGLE CAPITAL CORPORATION

Unaudited Consolidated Schedule of Investments

March 31, 2012


Portfolio Company	Industry	Type of Investment⁽¹⁾⁽²⁾	Principal Amount		Cost		Fair Value⁽³⁾

Renew Life Formulas, Inc. (3%)*	Nutritional Supplement Manufacturing and Distribution	Subordinated Notes (12% Cash, 2% PIK, Due 03/15)	$	13,283,019	$	13,052,984	$	13,052,984

				13,283,019		13,052,984		13,052,984

ROM Acquisition Corporation (2%)*	Military and Industrial Vehicles Equipment Manufacturing	Subordinated Note (12% Cash, 3% PIK, Due 3/17)		8,500,000		8,415,000		8,415,000

				8,500,000		8,415,000		8,415,000

Sheplers, Inc. (3%)*	Western Apparel Retailer	Subordinated Note (13.15% Cash, Due 12/16)		8,750,000		8,539,166		8,539,166
		Subordinated Note (10% Cash, 7% PIK, Due 12/17)		3,823,585		3,751,521		3,751,521

				12,573,585		12,290,687		12,290,687

SRC, Inc. (2%)*	Specialty Chemical Manufacturer	Subordinated Notes (12% Cash, 2% PIK, Due 09/14)		8,924,137		8,701,808		8,701,808
		Common Stock Purchase Warrants				123,800		—

				8,924,137		8,825,608		8,701,808

Stella Environmental Services, LLC (1%)*	Waste Transfer Stations	Subordinated Notes (12% Cash, 3.5% PIK, Due 2/17)		6,277,344		6,132,344		6,132,344
		Common Stock Purchase Warrants				20,000		20,000

				6,277,344		6,152,344		6,152,344

Syrgis Holdings, Inc. (1%)*	Specialty Chemical Manufacturer	Senior Notes (7.75%-10.75% Cash, Due 08/12-02/14)		2,063,764		2,059,161		2,059,161
		Class C Units (2,114 units)				1,000,000		1,625,000

				2,063,764		3,059,161		3,684,161

The Krystal Company (3%)*	Quick Serve Restaurants	Subordinated Note (12% Cash, 3% PIK, Due 6/17)		12,232,203		11,987,783		11,987,783
		Class A Units of Limited Partnership				2,000,000		2,000,000

				12,232,203		13,987,783		13,987,783

TMR Automotive Service Supply, LLC (1%)	Automotive Supplies	Subordinated Note (12% Cash, 1% PIK, Due 03/16)		4,750,000		4,500,930		4,500,930
		Unit Purchase Warrant (329,518 units)				195,000		322,000

				4,750,000		4,695,930		4,822,930

Top Knobs USA, Inc. (3%)	Hardware Designer and Distributor	Subordinated Note (12% Cash, 4.5% PIK, Due 05/17)		10,486,949		10,338,011		10,338,011
		Common Stock (26,593 shares)				750,000		763,000

				10,486,949		11,088,011		11,101,011

Trinity Consultants Holdings, Inc. (2%)*	Air Quality Consulting Services	Subordinated Note (12% Cash, 2.5% PIK, Due 11/17)		7,262,200		7,122,383		7,122,383
		Series A Preferred Stock (10,000 units)				950,000		950,000
		Common Stock (55,556 units)				50,000		50,000

				7,262,200		8,122,383		8,122,383

TrustHouse Services Group, Inc. (3%)*	Food Management Services	Subordinated Note (12% Cash, 2% PIK, Due 07/18)		13,429,668		13,208,258		13,208,258
		Class A Units (1,557 units)				512,124		872,000
		Class B Units (82 units)				26,954		31,000

				13,429,668		13,747,336		14,111,258

Tulsa Inspection Resources, Inc. (2%)*	Pipeline Inspection Services	Subordinated Note (14%-17.5% Cash, Due 03/14)		5,810,588		5,597,045		5,597,045
		Common Unit (1 unit)				407,000		169,000
		Common Stock Warrants (8 shares)				321,000		904,000

				5,810,588		6,325,045		6,670,045

Twin-Star International, Inc. (1%)*	Consumer Home Furnishings Manufacturer	Subordinated Note (12% Cash, 1% PIK, Due 04/14)		4,500,000		4,479,768		4,479,768
		Senior Note (4.4%, Due 04/13)		1,049,490		1,049,490		1,049,490

				5,549,490		5,529,258		5,529,258

United Biologics, LLC (3%)*	Allergy Immunotherapy Services	Subordinated Note (12% Cash, 2% PIK, Due 03/17)		10,015,000		8,976,883		8,976,883
		Class A Common Stock (177,935 shares)				1,999,989		1,999,989
		Class A & Class B Unit Purchase Warrants				838,117		838,117

				10,015,000		11,814,989		11,814,989

Wholesale Floors, Inc. (1%)*	Commercial Services	Subordinated Note (12.5% Cash, 3.5% PIK, Due 06/14)		3,892,041		3,814,306		3,814,306
		Membership Interest Purchase Warrant (4.0%)				132,800		—

				3,892,041		3,947,106		3,814,306

TRIANGLE CAPITAL CORPORATION

Unaudited Consolidated Schedule of Investments

March 31, 2012


Portfolio Company	Industry	Type of Investment⁽¹⁾⁽²⁾	Principal Amount		Cost		Fair Value⁽³⁾
Workforce Software, LLC (2%)*	Software Provider	Subordinated Note (11% Cash, 3% PIK, Due 11/16)	$	7,000,000	$	6,100,883	$	6,100,883
		Class B Preferred Units (1,020,000 units)				1,020,000		1,055,000
		Common Unit Purchase Warrants (2,224,561 units)				782,300		1,259,000

				7,000,000		7,903,183		8,414,883

Yellowstone Landscape Group, Inc. (3%)*	Landscaping Services	Subordinated Note (12% Cash, 3% PIK, Due 04/14)		12,912,344		12,787,797		12,787,797

				12,912,344		12,787,797		12,787,797


Subtotal Non–Control / Non–Affiliate Investments				408,452,020		424,962,392		436,419,052

*Affiliate Investments:*
American De-Rosa Lamparts, LLC and Hallmark Lighting (1%)*	Wholesale and Distribution	Subordinated Note (12% Cash, 6% PIK, Due 10/13)		6,149,120		5,229,264		5,229,264
		Membership Units (6,516 Units)				350,000		—

				6,149,120		5,579,264		5,229,264

AP Services, Inc. (1%)*	Fluid Sealing Supplies and Services	Subordinated Note (12% Cash, 2% PIK, Due 09/15)		4,373,582		4,285,506		4,285,506
		Class A Units (933 units)				933,333		1,177,000
		Class B Units (496 units)				—		67,000

				4,373,582		5,218,839		5,529,506

Asset Point, LLC (1%)*	Asset Management Software Provider	Senior Note (12% Cash, 5% PIK, Due 03/13)		6,131,799		6,106,812		6,106,812
		Senior Note (12% Cash, 2% PIK, Due 07/15)		620,700		620,700		555,000
		Subordinated Note (7% Cash, Due 03/13)		941,798		941,798		831,000
		Membership Units (1,000,000 units)				8,203		373,000
		Options to Purchase Membership Units (342,407 units)				500,000		167,000
		Membership Unit Warrants (356,506 units)				—		2,000

				7,694,297		8,177,513		8,034,812

Axxiom Manufacturing, Inc. (0%)*	Industrial Equipment Manufacturer	Common Stock (136,400 shares)				200,000		1,232,000
		Common Stock Warrant (4,000 shares)				—		36,000

						200,000		1,268,000

Brantley Transportation, LLC (“Brantley Transportation”) and Pine Street Holdings, LLC (“Pine Street”) ⁽⁴⁾ (1%)*	Oil and Gas Services	Subordinated Note—Brantley Transportation (14% Cash, 5% PIK, Due 12/12)		3,997,731		3,973,079		3,973,079
		Common Unit Warrants—Brantley Transportation (4,560 common units)				33,600		381,000
		Preferred Units—Pine Street (200 units)				200,000		719,000
		Common Unit Warrants—Pine Street (2,220 units)				—		88,000

				3,997,731		4,206,679		5,161,079

Captek Softgel International, Inc. (2%)*	Nutraceutical Manufacturer	Subordinated Note (12% Cash, 4% PIK, Due 08/16)		8,361,089		8,223,010		8,223,010
		Class A Units (80,000 units)				800,000		1,298,000

				8,361,089		9,023,010		9,521,010

Dyson Corporation (1%)*	Custom	Class A Units (1,000,000 units)				1,000,000		3,741,000
	Forging and
	Fastener
	Supplies

						1,000,000		3,741,000

Equisales, LLC (0%)*	Energy Products and Services	Subordinated Note (13% Cash, 4% PIK, Due 04/12)		3,157,043		3,157,043		2,659,000
		Class A Units (500,000 units)				480,900		—

				3,157,043		3,637,943		2,659,000

Fischbein Partners, LLC (2%)*	Packaging and Materials Handling Equipment Manufacturer	Subordinated Note (12% Cash, 2% PIK, Due 10/16)		6,790,740		6,675,683		6,675,683
		Class A Units (1,750,000 units)				417,088		3,772,000

				6,790,740		7,092,771		10,447,683

Main Street Gourmet, LLC (1%)*	Baked Goods Provider	Subordinated Notes (12% Cash, 4.5% PIK, Due 10/16)		4,182,542		4,113,502		4,113,502
		Jr. Subordinated Notes (8% Cash, 2% PIK, Due 04/17)		1,020,094		1,002,804		729,000
		Preferred Units (233 units)				211,867		—
		Common B Units (3,000 units)				23,140		—
		Common A Units (1,652 units)				14,993		—

				5,202,636		5,366,306		4,842,502

Plantation Products, LLC (3%)*	Seed Manufacturing	Subordinated Notes (13% Cash, 4.5% PIK, Due 06/16)		15,377,516		15,076,580		15,076,580
		Preferred Units (1,127 units)				1,127,000		1,244,000
		Common Units (92,000 units)				23,000		155,000

				15,377,516		16,226,580		16,475,580

QC Holdings, Inc. (0%)*	Lab Testing Services	Common Stock (5,594 shares)				563,602		393,000

						563,602		393,000

Technology Crops International (2%)*	Supply Chain Management Services	Subordinated Note (12% Cash, 5% PIK, Due 03/15)		5,681,558		5,619,098		5,619,098
		Common Units (50 Units)				500,000		769,000

				5,681,558		6,119,098		6,388,098

TRIANGLE CAPITAL CORPORATION

Unaudited Consolidated Schedule of Investments

March 31, 2012


Portfolio Company	Industry	Type of Investment⁽¹⁾⁽²⁾	Principal Amount		Cost		Fair Value⁽³⁾
Venture Technology Groups, Inc. (1%)*	Fluid and Gas Handling Products Distributor	Subordinated Note (12.5% Cash, 4% PIK, Due 09/16)	$	5,499,849	$	5,400,372	$	3,239,000
		Class A Units (1,000,000 Units)				1,000,000		—

				5,499,849		6,400,372		3,239,000

Waste Recyclers Holdings, LLC (1%)*	Environmental and Facilities Services	Class A Preferred Units (280 Units)				2,251,100		—
		Class B Preferred Units (985,372 Units)				3,304,218		4,115,000
		Class C Preferred Units (1,444,475 Units)				1,499,531		1,818,000
		Common Unit Purchase Warrant (1,170,083 Units)				748,900		—
		Common Units (153,219 Units)				180,783		—

						7,984,532		5,933,000

Wythe Will Tzetzo, LLC (3%)*	Confectionary Goods Distributor	Subordinated Notes (13% Cash, Due 10/16)		10,357,475		9,904,615		9,904,615
		Series A Preferred Units (74,764 units)				1,500,000		1,987,000
		Common Unit Purchase Warrants (25,065 units)				301,510		443,000

				10,357,475		11,706,125		12,334,615


Subtotal Affiliate Investments				82,642,636		98,502,634		101,197,149

*Control Investments:*
FCL Graphics, Inc. (“FCL”) and FCL Holding SPV, LLC (“SPV”) (1%)*	Commercial Printing Services	Senior Note—FCL (5.0% Cash, Due 9/16)		1,469,747		1,469,747		1,469,747
		Senior Note—FCL (8.0% Cash, 2% PIK, Due 9/16)		1,153,649		1,151,698		968,000
		Senior Note—SPV (2.4% Cash, 6% PIK, Due 9/16)		964,486		964,486		—
		Members Interests—SPV (299,875 Units)				—		—

				3,587,882		3,585,931		2,437,747

Fire Sprinkler Systems, Inc. (0%)*	Specialty Trade Contractors	Subordinated Notes (2% PIK, Due 04/12)		3,473,830		2,955,028		208,000
		Common Stock (2,978 shares)				294,624		—

				3,473,830		3,249,652		208,000

Fischbein, LLC (1%)*	Packaging and Materials Handling Equipment Manufacturer	Class A-1 Common Units (501,984 units)				59,315		283,816
		Class A Common Units (3,839,068 units)				453,630		1,859,433

						512,945		2,143,249

Gerli & Company (0%)*	Specialty Woven Fabrics Manufacturer	Subordinated Note (8.5% Cash, Due 03/15)		3,267,018		3,000,000		2,030,000
		Class A Preferred Shares (1,211 shares)				855,000		—
		Class C Preferred Shares (744 shares)				—		—
		Class E Preferred Shares (400 shares)				161,440		—
		Common Stock (300 shares)				100,000		—

				3,267,018		4,116,440		2,030,000


Subtotal Control Investments				10,328,730		11,464,968		6,818,996


Total Investments, March 31, 2012 (132%)*			$	501,423,386	$	534,929,994	$	544,435,197

*	Value as a percent of net assets

(1)	All debt investments are income producing. Common stock, preferred stock and all warrants are non–income producing.

(2)	Disclosures of interest rates on notes include cash interest rates and payment–in–kind (“PIK”) interest rates.

(3)	All investments are restricted as to resale and were valued at fair value as determined in good faith by the Board of Directors.

(4)	Pine Street Holdings, LLC is the majority owner of Brantley Transportation, LLC and its sole business purpose is its ownership of Brantley Transportation, LLC.

See accompanying notes.

TRIANGLE CAPITAL CORPORATION

Consolidated Schedule of Investments

December 31, 2011


Portfolio Company	Industry	Type of Investment⁽¹⁾⁽²⁾	Principal Amount		Cost		Fair Value⁽³⁾
*Non–Control / Non–Affiliate Investments:*
Ambient Air Corporation (“AA”) and Peaden-Hobbs Mechanical, LLC (“PHM”) (1%)*	Specialty Trade Contractors	Subordinated Note-AA (15% Cash, 3% PIK, Due 06/13)	$	4,127,773	$	4,103,291	$	4,103,291
		Subordinated Note-PHM (12% Cash, Due 09/12)		12,857		12,857		12,857
		Common Stock-PHM (128,571 shares)				128,571		128,571
		Common Stock Warrants-AA (455 shares)				142,361		760,000

				4,140,630		4,387,080		5,004,719

Ann’s House of Nuts, Inc. (3%)*	Trail Mixes and Nut Producers	Subordinated Note (12% Cash, 1% PIK, Due 11/17)		7,080,843		6,716,662		6,716,662
		Preferred A Units (22,368 units)				2,124,957		2,407,000
		Preferred B Units (10,380 units)				986,059		1,204,000
		Common Units (190,935 units)				150,000		—
		Common Stock Warrants (14,558 shares)				14,558		—

				7,080,843		9,992,236		10,327,662

Aramsco, Inc. (1%)	Environmental	Subordinated Note (12% Cash, 2% PIK, Due
	Emergency Preparedness Products Distributor	03/14)		1,800,997		1,673,278		1,673,278

				1,800,997		1,673,278		1,673,278

Assurance Operations Corporation (0%)*	Metal Fabrication	Common Stock (517 Shares)				516,867		773,000
Assurance Operations Corporation (0%)*
						516,867		773,000

BioSan Laboratories, Inc. (2%)*	Nutritional	Subordinated Note (12% Cash, 3.8% PIK, Due
	Supplement Manufacturing and Distribution	10/16)		5,276,296		5,179,676		5,179,676

				5,276,296		5,179,676		5,179,676

Botanical Laboratories, Inc. (3%)*	Nutritional	Senior Notes (14% Cash, 1% PIK, Due 02/15)		10,114,528		9,580,196		9,122,000
	Supplement	Common Unit Warrants (998,680 Units)				474,600		—

	Manufacturing			10,114,528		10,054,796		9,122,000
	and Distribution

Capital Contractors, Inc. (3%)*	Janitorial and Facilities Maintenance Services	Subordinated Notes (12% Cash, 2% PIK, Due 12/15)		9,185,225		8,617,853		8,617,853
		Common Stock Warrants (20 shares)				492,000		398,000

				9,185,225		9,109,853		9,015,853

Carolina Beverage Group, LLC (4%)*	Beverage Manufacturing and Packaging	Subordinated Note (12% Cash, 4% PIK, Due 02/16)		13,260,895		13,055,973		13,055,973
		Class A Units (11,974 Units)				1,077,615		1,120,000
		Class B Units (11,974 Units)				119,735		—

				13,260,895		14,253,323		14,175,973

CRS Reprocessing, LLC (8%)*	Fluid Reprocessing Services	Subordinated Note (12% Cash, 2% PIK, Due 11/15)		11,357,260		11,022,004		11,022,004
		Subordinated Note (10% Cash, 4% PIK, Due 11/15)		11,016,583		10,020,937		10,020,937
		Series C Preferred Units (26 Units)				288,342		476,000
		Common Unit Warrant (550 Units)				1,253,556		4,040,000

				22,373,843		22,584,839		25,558,941

CV Holdings, LLC (5%)*	Specialty Healthcare Products Manufacturer	Subordinated Note (12% Cash, 4% PIK, Due 09/13)		9,279,054		8,845,875		8,845,875
		Subordinated Note (12% Cash, Due 09/13)		6,000,000		5,912,355		5,912,355
		Royalty rights				874,400		920,000

				15,279,054		15,632,630		15,678,230

DLR Restaurants, LLC (3%)*	Restaurant	Subordinated Note (12% Cash, 3% PIK, Due 03/16)		10,660,442		10,448,050		10,448,050
		Subordinated Note (12% Cash, 4% PIK, Due 03/16)		752,083		752,083		752,083
		Royalty rights				—		—

				11,412,525		11,200,133		11,200,133

Electronic Systems Protection, Inc. (2%)*	Power Protection Systems Manufacturing	Subordinated Note (12% Cash, 2% PIK, Due 12/15)		4,162,798		4,128,357		4,128,357
		Senior Note (8.3% Cash, Due 01/14)		681,475		681,475		681,475
		Common Stock (570 shares)				285,000		367,000

				4,844,273		5,094,832		5,176,832

Frozen Specialties, Inc. (3%)*	Frozen Foods Manufacturer	Subordinated Note (13% Cash, 5% PIK, Due 07/14)		8,478,731		8,391,839		8,391,839
Frozen Specialties, Inc. (3%)*
				8,478,731		8,391,839		8,391,839

Garden Fresh Restaurant Corp. (0%)*	Restaurant	Membership Units (5,000 units)				500,000		820,000
Garden Fresh Restaurant Corp. (0%)*
						500,000		820,000

Grindmaster-Cecilware Corp. (2%)*	Food Services Equipment Manufacturer	Subordinated Note (12% Cash, 4.5% PIK, Due 04/16)		6,274,350		6,198,309		5,104,000
Grindmaster-Cecilware Corp. (2%)*
				6,274,350		6,198,309		5,104,000

TRIANGLE CAPITAL CORPORATION

Consolidated Schedule of Investments

December 31, 2011


Portfolio Company	Industry	Type of Investment⁽¹⁾⁽²⁾	Principal Amount		Cost		Fair Value⁽³⁾
Hatch Chile Co., LLC (2%)*	Food Products Distributor	Senior Note (19% Cash, Due 07/15)	$	4,500,000	$	4,411,111	$	4,411,111
		Subordinated Note (14% Cash, Due 07/15)		1,000,000		865,687		865,687
		Unit Purchase Warrant (5,265 Units)				149,800		216,000

				5,500,000		5,426,598		5,492,798

Home Physicians, LLC (“HP”) and Home Physicians Holdings, LP (“HPH”) (3%)*	In-home primary care physician services	Subordinated Note-HP (12% Cash, 5% PIK, Due 03/16)		10,654,096		10,454,979		8,868,000
		Subordinated Note-HPH (4% Cash, 6% PIK, Due 03/16)		1,283,791		1,283,791		—
		Royalty rights				—		—

				11,937,887		11,738,770		8,868,000

Infrastructure Corporation of America, Inc. (3%)*	Roadway Maintenance, Repair and Engineering Services	Subordinated Note (12% Cash, 1% PIK, Due 10/15)		10,878,815		9,876,796		9,876,796
		Common Stock Purchase Warrant (199,526 shares)				980,000		1,348,000

				10,878,815		10,856,796		11,224,796

Inland Pipe Rehabilitation Holding Company LLC (7%)*	Cleaning and Repair Services	Subordinated Note (13% Cash, 2.5% PIK, Due 12/16)		20,277,473		19,996,881		19,996,881
		Membership Interest Purchase Warrant (3.0%)				853,500		2,112,000

				20,277,473		20,850,381		22,108,881

Library Systems & Services, LLC (2%)*	Municipal Business Services	Subordinated Note (12.5% Cash, 4.5% PIK, Due 06/15)		5,250,001		5,130,053		5,130,053
		Common Stock Warrants (112 shares)				58,995		723,000

				5,250,001		5,189,048		5,853,053

Magpul Industries Corp. (4%)	Firearm Accessories Manufacturer and Distributor	Subordinated Note (12% Cash, 3% PIK, Due 03/17)		13,300,000		13,042,711		13,042,711
		Preferred Units (1,470 Units)				1,470,000		1,470,000
		Common Units (30,000 Units)				30,000		30,000

				13,300,000		14,542,711		14,542,711

McKenzie Sports Products, LLC (2%)*	Taxidermy Manufacturer	Subordinated Note (13% Cash, 1% PIK, Due 10/17)		6,071,841		5,966,205		5,966,205
McKenzie Sports Products, LLC (2%)*
				6,071,841		5,966,205		5,966,205
Media Storm, LLC (3%)*	Marketing Services	Subordinated Note (12% Cash, 2% PIK, Due 10/17)		8,532,111		8,449,580		8,449,580
		Membership Units (1,216,204 Units)				1,216,204		1,216,204

				8,532,111		9,665,784		9,665,784

Media Temple, Inc. (5%)*	Web Hosting Services	Subordinated Note (12% Cash, 5.5% PIK, Due 04/15)		8,800,000		8,658,463		8,658,463
		Convertible Note (8% Cash, 6% PIK, Due 04/15)		3,200,000		2,778,030		4,687,000
		Common Stock Purchase Warrant (28,000 Shares)				536,000		2,051,000

				12,000,000		11,972,493		15,396,463

Minco Technology Labs, LLC (2%)*	Semiconductor Distribution	Subordinated Note (13% Cash, 3.25% PIK, Due 05/16)		5,272,430		5,170,334		5,170,334
		Class A Units (5,000 Units)				500,000		31,000

				5,272,430		5,670,334		5,201,334

National Investment Managers Inc. (4%)*	Retirement Plan Administrator	Subordinated Note (11% Cash, 5% PIK, Due 09/16)		11,703,034		11,450,996		11,450,996
		Preferred A Units (90,000 Units)				900,000		479,000
		Common Units (10,000 Units)				100,000		—

				11,703,034		12,450,996		11,929,996

Novolyte Technologies, Inc. (4%)*	Specialty Manufacturing	Subordinated Note (12% Cash, 4% PIK, Due 07/16)		7,264,182		7,143,362		7,143,362
		Subordinated Note (12% Cash, 4% PIK, Due 07/16)		2,334,916		2,296,081		2,296,081
		Preferred Units (641 units)				661,227		888,000
		Common Units (24,522 units)				165,306		1,744,000

				9,599,098		10,265,976		12,071,443

Pomeroy IT Solutions (3%)*	Information	Subordinated Notes (13% Cash, 2% PIK, Due
Pomeroy IT Solutions (3%)*	Information
	Technology Outsourcing Services	02/16)		10,181,198		9,955,154		9,955,154

				10,181,198		9,955,154		9,955,154

PowerDirect Marketing, LLC (2%)*	Marketing Services	Subordinated Note (12% Cash, 2% PIK, Due 05/16)		8,100,993		7,580,433		7,580,433
		Common Unit Purchase Warrants				402,000		548,000

				8,100,993		7,982,433		8,128,433

Renew Life Formulas, Inc. (4%)*	Nutritional	Subordinated Notes (12% Cash, 3% PIK, Due
	Supplement	03/15)		13,401,006		13,155,235		13,155,235
	Manufacturing
	and
	Distribution

				13,401,006		13,155,235		13,155,235

TRIANGLE CAPITAL CORPORATION

Consolidated Schedule of Investments

December 31, 2011


Portfolio Company	Industry	Type of Investment⁽¹⁾⁽²⁾	Principal Amount		Cost		Fair Value⁽³⁾
Sheplers, Inc. (4%)*	Western Apparel Retailer	Subordinated Note (13.15% Cash, Due 12/16)	$	8,750,000	$	8,531,250	$	8,531,250
Sheplers, Inc. (4%)*		Subordinated Note (10% Cash, 7% PIK, Due 12/17)		3,758,021		3,683,021		3,683,021

				12,508,021		12,214,271		12,214,271

SRC, Inc. (3%)*	Specialty Chemical Manufacturer	Subordinated Notes (12% Cash, 2% PIK, Due 09/14)		8,879,665		8,640,013		8,640,013
SRC, Inc. (3%)*		Common Stock Purchase Warrants				123,800		—

				8,879,665		8,763,813		8,640,013

Syrgis Holdings, Inc. (1%)*	Specialty Chemical Manufacturer	Senior Notes (7.75%-10.75% Cash, Due 08/12-02/14)		2,444,766		2,437,942		2,437,942
Syrgis Holdings, Inc. (1%)*		Class C Units (2,114 units)				1,000,000		1,597,000

				2,444,766		3,437,942		4,034,942

TBG Anesthesia Management, LLC (3%)*	Physician Management Services	Senior Note (13.5% Cash, Due 11/14)		10,750,000		10,445,062		10,445,062
TBG Anesthesia Management, LLC (3%)*		Warrant (263 shares)				276,100		239,000

				10,750,000		10,721,162		10,684,062

TMR Automotive Service Supply, LLC (2%)	Automotive Supplies	Subordinated Note (12% Cash, 1% PIK, Due 03/16)		5,000,000		4,738,933		4,738,933
TMR Automotive Service Supply, LLC (2%)		Unit Purchase Warrant (329,518 units)				195,000		284,000

				5,000,000		4,933,933		5,022,933

Top Knobs USA, Inc. (3%)	Hardware Designer and Distributor	Subordinated Note (12% Cash, 4.5% PIK, Due 05/17)		10,369,002		10,209,875		10,209,875
Top Knobs USA, Inc. (3%)		Common Stock (26,593 shares)				750,000		733,000

				10,369,002		10,959,875		10,942,875

Trinity Consultants Holdings, Inc. (2%)*	Air Quality Consulting Services	Subordinated Note (12% Cash, 2.5% PIK, Due 11/17)		7,216,500		7,072,500		7,072,500
		Series A Preferred Stock (10,000 units)				950,000		950,000
		Common Stock (55,556 units)				50,000		50,000

				7,216,500		8,072,500		8,072,500

TrustHouse Services Group, Inc. (4%)*	Food Management Services	Subordinated Note (12% Cash, 2% PIK, Due 07/18)		13,362,115		13,136,232		13,136,232
		Class A Units (1,557 units)				512,124		799,000
		Class B Units (82 units)				26,954		28,000

				13,362,115		13,675,310		13,963,232

Tulsa Inspection Resources, Inc. (2%)*	Pipeline Inspection Services	Subordinated Note (14%-17.5% Cash, Due 03/14)		5,810,588		5,574,292		5,574,292
		Common Unit (1 unit)				200,000		117,000
		Common Stock Warrants (8 shares)				321,000		627,000

				5,810,588		6,095,292		6,318,292

Twin-Star International, Inc. (2%)*	Consumer Home Furnishings Manufacturer	Subordinated Note (12% Cash, 1% PIK, Due 04/14)		4,500,000		4,476,065		4,476,065
Twin-Star International, Inc. (2%)*		Senior Note (4.4%, Due 04/13)		1,052,240		1,052,240		1,052,240

				5,552,240		5,528,305		5,528,305

Wholesale Floors, Inc. (1%)*	Commercial Services	Subordinated Note (12.5% Cash, 3.5% PIK, Due 06/14)		3,858,183		3,773,066		3,773,066
Wholesale Floors, Inc. (1%)*		Membership Interest Purchase Warrant (4.0%)				132,800		—

				3,858,183		3,905,866		3,773,066

Workforce Software, LLC (2%)*	Software Provider	Subordinated Note (11% Cash, 3% PIK, Due 11/16)		7,000,000		6,065,200		6,065,200
		Class B Preferred Units (1,020,000 units)				1,020,000		1,020,000
		Common Unit Purchase Warrants (2,224,561 units)				782,300		782,300

				7,000,000		7,867,500		7,867,500

Yellowstone Landscape Group, Inc. (4%)*	Landscaping Services	Subordinated Note (12% Cash, 3% PIK, Due 04/14)		12,816,222		12,678,077		12,678,077

				12,816,222		12,678,077		12,678,077


Subtotal Non–Control / Non–Affiliate Investments				377,095,379		389,312,451		396,502,490

TRIANGLE CAPITAL CORPORATION

Consolidated Schedule of Investments

December 31, 2011


Portfolio Company	Industry	Type of Investment⁽¹⁾⁽²⁾	Principal Amount		Cost		Fair Value⁽³⁾
*Affiliate Investments:*
American De-Rosa Lamparts, LLC and Hallmark Lighting (2%)*	Wholesale and Distribution	Subordinated Note (10% PIK, Due 10/13)	$	6,056,794	$	5,213,450	$	5,213,450
		Membership Units (6,516 Units)				350,000		—

				6,056,794		5,563,450		5,213,450

AP Services, Inc. (2%)*	Fluid Sealing Supplies and Services	Subordinated Note (12% Cash, 2% PIK, Due 09/15)		4,351,545		4,258,465		4,258,465
		Class A Units (933 units)				933,333		1,181,000
		Class B Units (496 units)				—		80,000

				4,351,545		5,191,798		5,519,465

Asset Point, LLC (2%)*	Asset Management Software Provider	Senior Note (12% Cash, 5% PIK, Due 03/13)		6,054,948		6,024,163		6,024,163
		Senior Note (12% Cash, 2% PIK, Due 07/15)		617,572		617,572		518,000
		Subordinated Note (7% Cash, Due 03/13)		941,798		941,798		786,000
		Membership Units (1,000,000 units)				8,203		346,000
		Options to Purchase Membership Units (342,407 units)				500,000		149,000
		Membership Unit Warrants (356,506 units)				—		2,000

				7,614,318		8,091,736		7,825,163

Axxiom Manufacturing, Inc. (0%)*	Industrial Equipment Manufacturer	Common Stock (136,400 shares)				200,000		1,140,000
		Common Stock Warrant (4,000 shares)				—		33,000

						200,000		1,173,000

Brantley Transportation, LLC (“Brantley Transportation”) and Pine Street Holdings, LLC (“Pine Street”) ⁽⁴⁾ (2%)*	Oil and Gas Services	Subordinated Note—Brantley Transportation (14% Cash, 5% PIK, Due 12/12)		3,947,627		3,915,231		3,915,231
		Common Unit Warrants—Brantley Transportation (4,560 common units)				33,600		401,000
		Preferred Units—Pine Street (200 units)				200,000		757,000
		Common Unit Warrants—Pine Street (2,220 units)				—		99,000

				3,947,627		4,148,831		5,172,231

Captek Softgel International, Inc. (3%)*	Nutraceutical Manufacturer	Subordinated Note (12% Cash, 4% PIK, Due 08/16)		8,277,116		8,133,312		8,133,312
		Class A Units (80,000 units)				800,000		1,292,000

				8,277,116		8,933,312		9,425,312

Dyson Corporation (1%)*	Custom Forging and Fastener Supplies	Class A Units (1,000,000 units)				1,000,000		3,836,000

						1,000,000		3,836,000

Equisales, LLC (1%)*	Energy Products and Services	Subordinated Note (13% Cash, 4% PIK, Due 04/12)		3,125,336		3,116,853		3,045,000
		Class A Units (500,000 units)				480,900		535,000

				3,125,336		3,597,753		3,580,000

Fischbein Partners, LLC (3%)*	Packaging and Materials Handling Equipment Manufacturer	Subordinated Note (12% Cash, 2% PIK, Due 10/16)		6,756,525		6,636,697		6,636,697
		Class A Units (1,750,000 units)				417,088		3,344,000

				6,756,525		7,053,785		9,980,697

Main Street Gourmet, LLC (1%)*	Baked Goods Provider	Subordinated Notes (12% Cash, 4.5% PIK, Due 10/16)		4,135,501		4,063,598		4,063,598
		Jr. Subordinated Notes (8% Cash, 2% PIK, Due 04/17)		1,014,963		996,975		716,000
		Preferred Units (233 units)				211,867		—
		Common B Units (3,000 units)				23,140		—
		Common A Units (1,652 units)				14,993		—

				5,150,464		5,310,573		4,779,598

Plantation Products, LLC (5%)*	Seed Manufacturing	Subordinated Notes (13% Cash, 4.5% PIK, Due 06/16)		15,203,916		14,889,867		14,889,867
		Preferred Units (1,127 units)				1,127,000		1,221,000
		Common Units (92,000 units)				23,000		142,000

				15,203,916		16,039,867		16,252,867

QC Holdings, Inc. (0%)*	Lab Testing Services	Common Stock (5,594 shares)				563,602		393,000

						563,602		393,000

Technology Crops International (2%)*	Supply Chain Management Services	Subordinated Note (12% Cash, 5% PIK, Due 03/15)		5,610,350		5,543,617		5,543,617
		Common Units (50 Units)				500,000		589,000

				5,610,350		6,043,617		6,132,617

TRIANGLE CAPITAL CORPORATION

Consolidated Schedule of Investments

December 31, 2011


Portfolio Company	Industry	Type of Investment⁽¹⁾⁽²⁾	Principal Amount		Cost		Fair Value⁽³⁾
Venture Technology Groups, Inc. (2%)*	Fluid and Gas	Subordinated Note (12.5% Cash, 4% PIK,
	Handling Products Distributor	Due 09/16)	$	5,444,612	$	5,341,062	$	5,341,062
		Class A Units (1,000,000 Units)				1,000,000		530,000

				5,444,612		6,341,062		5,871,062

Waste Recyclers Holdings, LLC (2%)*	Environmental and Facilities Services	Class A Preferred Units (280 Units)				2,251,100		—
		Class B Preferred Units (985,372 Units)				3,304,218		4,310,000
		Class C Preferred Units (1,444,475 Units)				1,499,531		1,752,000
		Common Unit Purchase Warrant (1,170,083 Units)				748,900		—
		Common Units (153,219 Units)				180,783		—

						7,984,532		6,062,000

Wythe Will Tzetzo, LLC (4%)*	Confectionary Goods Distributor	Subordinated Notes (13% Cash, Due 10/16)		10,357,475		9,885,836		9,885,836
		Series A Preferred Units (74,764 units)				1,500,000		1,784,000
		Common Unit Purchase Warrants (25,065 units)				301,510		380,000

				10,357,475		11,687,346		12,049,836


Subtotal Affiliate Investments				81,896,078		97,751,264		103,266,298

*Control Investments:*
FCL Graphics, Inc. (“FCL”) and FCL Holding SPV, LLC (“SPV”) (1%)*	Commercial Printing Services	Senior Note—FCL (5.0% Cash, Due 9/16)		1,485,821		1,478,538		1,478,538
		Senior Note—FCL (8.0% Cash, 2% PIK, Due 9/16)		1,147,836		1,145,436		955,000
		Senior Note—SPV (2.5% Cash, 6% PIK, Due 9/16)		950,328		950,328		343,000
		Members Interests—SPV (299,875 Units)				—		—

				3,583,985		3,574,302		2,776,538

Fire Sprinkler Systems, Inc. (0%)*	Specialty Trade Contractors	Subordinated Notes (2% PIK, Due 04/12)		3,281,284		2,780,028		443,000
		Common Stock (2,978 shares)				294,624		—

				3,281,284		3,074,652		443,000

Fischbein, LLC (1%)*	Packaging and Materials Handling Equipment Manufacturer	Class A-1 Common Units (501,984 units)				59,315		283,816
		Class A Common Units (3,839,068 units)				453,630		1,859,433

						512,945		2,143,249

Gerli & Company (1%)*	Specialty Woven Fabrics Manufacturer	Subordinated Note (8.5% Cash, Due 03/15)		3,198,299		3,000,000		1,947,000
		Class A Preferred Shares (1,211 shares)				855,000		—
		Class C Preferred Shares (744 shares)				—		—
		Class E Preferred Shares (400 shares)				161,440		—
		Common Stock (300 shares)				100,000		—

				3,198,299		4,116,440		1,947,000


Subtotal Control Investments				10,063,568		11,278,339		7,309,787


Total Investments, December 31, 2011(152%)*			$	469,055,025	$	498,342,054	$	507,078,575

*	Value as a percent of net assets

(1)	All debt investments are income producing. Common stock, preferred stock and all warrants are non–income producing.

(2)	Disclosures of interest rates on subordinated notes include cash interest rates and payment–in–kind (“PIK”) interest rates.

(3)	All investments are restricted as to resale and were valued at fair value as determined in good faith by the Board of Directors.

(4)	Pine Street Holdings, LLC is the majority owner of Brantley Transportation, LLC and its sole business purpose is its ownership of Brantley Transportation, LLC.

See accompanying notes.

TRIANGLE CAPITAL CORPORATION

Notes to Unaudited Consolidated Financial Statements

1. ORGANIZATION, BASIS OF PRESENTATION AND BUSINESS

Organization

Triangle Capital Corporation and its wholly owned subsidiaries, including Triangle Mezzanine Fund LLLP ( “Triangle SBIC”) and Triangle Mezzanine Fund II LP (“Triangle SBIC II”) (collectively, the “Company”), operates as a Business Development Company (“BDC”) under the Investment Company Act of 1940 (the “1940 Act”). Triangle SBIC and Triangle SBIC II are specialty finance limited partnerships formed to make investments primarily in middle market companies located throughout the United States. On September 11, 2003, Triangle SBIC was licensed to operate as a Small Business Investment Company (“SBIC”) under the authority of the United States Small Business Administration (“SBA”). On May 26, 2010, Triangle SBIC II obtained its license to operate as an SBIC. As SBICs, both Triangle SBIC and Triangle SBIC II are subject to a variety of regulations concerning, among other things, the size and nature of the companies in which they may invest and the structure of those investments.

The Company currently operates as a closed–end, non–diversified investment company and has elected to be treated as a BDC under the 1940 Act. The Company is internally managed by its executive officers under the supervision of its Board of Directors. The Company does not pay management or advisory fees, but instead incurs the operating costs associated with employing executive management and investment and portfolio management professionals.

Basis of Presentation

The financial statements of the Company include the accounts of the Company and its wholly-owned subsidiaries, including Triangle SBIC and Triangle SBIC II. Neither Triangle SBIC nor Triangle SBIC II consolidates portfolio company investments. The effects of all intercompany transactions between the Company and its subsidiaries have been eliminated in consolidation.

The accompanying unaudited financial statements are presented in conformity with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Article 10 of Regulation S-X. Accordingly, certain disclosures accompanying annual consolidated financial statements prepared in accordance with U.S. GAAP are omitted. In the opinion of management, all adjustments, consisting solely of normal recurring adjustments necessary for the fair presentation of financial statements for the interim period, have been reflected in the unaudited consolidated financial statements. The current period’s results of operations are not necessarily indicative of results that ultimately may be achieved for the year. Additionally, the unaudited financial statements and notes should be read in conjunction with the audited financial statements and notes thereto for the period ended December 31, 2011. Financial statements prepared on a U.S. GAAP basis require management to make estimates and assumptions that affect the amounts and disclosures reported in the consolidated financial statements and accompanying notes. Such estimates and assumptions could change in the future as more information becomes known, which could impact the amounts reported and disclosed herein.

Recently Issued Accounting Standards

In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurements (Topic 820), Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs, or ASU 2011-04. ASU 2011-04 clarifies the application of existing fair value measurement and disclosure requirements, changes the application of some requirements for measuring fair value and requires additional disclosure for fair value measurements categorized in Level 3 of the fair value hierarchy. ASU 2011-04 is effective for interim and annual periods beginning after December 15, 2011. The Company adopted this standard on January 1, 2012. The adoption of ASU 2011-04 did not have a material impact on the Company’s process for measuring fair values or on its financial statements, other than the inclusion of additional required disclosures.

Reclassifications

Certain reclassifications have been made in the consolidated financial statements for the quarter ended March 31, 2011 in order to conform to current presentation. The Company had historically included losses realized on the extinguishment of debt in “Amortization of deferred financing fees” in the Consolidated Statements of Operations. Effective January 1, 2012, the Company records losses on the extinguishment of debt as a separate line item in the Consolidated Statements of Operations. See Note 4 to the Consolidated Financial Statements for further discussion of deferred financing fees.

2. INVESTMENTS

The Company primarily invests in subordinated debt (or 2^nd lien notes) of privately held companies. These subordinated debt investments generally are secured by a second priority security interest in the assets of the borrower. In addition, the Company generally invests in an equity instrument of the borrower, such as warrants to purchase common stock in the portfolio company or direct preferred or common equity interests. The Company also invests in senior debt (or 1^st lien notes) on a more limited basis.

The cost basis of our debt investments include any unamortized original issue discount, unamortized loan origination fees and payment–in–kind (“PIK”) interest, if any. Summaries of the composition of the Company’s investment portfolio at cost and fair value, and as a percentage of total investments, are shown in the following tables:


	Cost		Percentage of Total Portfolio			Fair Value		Percentage of Total Portfolio
March 31, 2012:
Subordinated debt and 2^nd lien notes	$	417,351,461		78	%	$	408,479,846		75	%
Senior debt and 1^st lien notes		68,624,919		13			68,441,221		13
Equity shares		38,948,717		7			49,504,013		9
Equity warrants		9,130,497		2			17,178,117		3
Royalty rights		874,400		—			832,000		—

	$	534,929,994		100	%	$	544,435,197		100	%


December 31, 2011:
Subordinated debt and 2^nd lien notes	$	393,830,719		79	%	$	387,169,056		76	%
Senior debt and 1^st lien notes		60,622,827		12			59,974,195		12
Equity shares		34,741,728		7			43,972,024		9
Equity warrants		8,272,380		2			15,043,300		3
Royalty rights		874,400		—			920,000		—

	$	498,342,054		100	%	$	507,078,575		100	%

During the three months ended March 31, 2012, the Company made four new investments totaling approximately $41.0 million and investments in three existing portfolio companies totaling approximately $1.0 million. During the three months ended March 31, 2011, the Company made five new investments totaling approximately $51.5 million and investments in four existing portfolio companies totaling approximately $16.8 million.

Investment Valuation Process

The Company has established and documented processes and methodologies for determining the fair values of portfolio company investments on a recurring basis in accordance with the 1940 Act and FASB ASC Topic 820, Fair Value Measurements and Disclosures (“ASC Topic 820”). Under ASC Topic 820, a financial instrument is categorized within the ASC Topic 820 valuation hierarchy based upon the lowest level of input to the valuation process that is significant to the fair value measurement. The three levels of valuation inputs established by ASC Topic 820 are as follows:

Level 1 Inputs – quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 Inputs – include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

Level 3 Inputs – include inputs that are unobservable and significant to the fair value measurement.

The Company’s investment portfolio is comprised of debt and equity instruments of privately held companies for which quoted prices or other inputs falling within the categories of Level 1 and Level 2 are not available. Therefore, the Company determines the fair value of its investments in good faith using level 3 inputs, pursuant to a valuation policy and process that is established by the management of the Company with the assistance of certain third-party advisors and subsequently approved by the Company’s Board of Directors. There is no single standard for determining fair value in good faith, as fair value depends upon the specific circumstances of each individual investment. The recorded fair values of the Company’s investments may differ significantly from fair values that would have been used had an active market for the securities existed. In addition, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different than the valuations currently assigned.

The Company’s valuation process is led by the Company’s executive officers and managing directors. The Company’s valuation process begins with a quarterly review of each investment in the Company’s investment portfolio by the Company’s executive officers and investment committee. Valuations of each portfolio security are then prepared by the Company’s investment professionals, who have direct responsibility for the origination, management and monitoring of each investment. Under the Company’s valuation policy, each investment valuation is subject to (i) a review by the lead investment officer responsible for the portfolio company investment and (ii) a peer review by a second investment officer or executive officer of the Company. Generally, any investment that is valued below cost is subjected to review by one of the Company’s executive officers. After the peer review is complete, the Company engages Duff & Phelps, LLC (“Duff & Phelps”), an independent valuation firm, to provide a third-party review of certain investments, as described further below. In addition, all investment valuations are provided to the Company’s independent registered public accounting firm each quarter in connection with quarterly review procedures and the annual audit of our financial statements. Finally, the Board of Directors has the responsibility for reviewing and approving, in good faith, the fair value of the Company’s investments in accordance with the 1940 Act.

Duff & Phelps provides third party valuation consulting services to the Company which consist of certain limited procedures that the Company identified and requested Duff & Phelps to perform (hereinafter referred to as the “procedures”). The Company generally requests Duff & Phelps to perform the procedures on each portfolio company at least once in every calendar year and for new portfolio companies, at least once in the twelve-month period subsequent to the initial investment. In addition, the Company generally requests Duff & Phelps to perform the procedures on a portfolio company when there has been a significant change in the fair value of the investment. In certain instances, the Company may determine that it is not cost-effective, and as a result is not in the Company’s stockholders’ best interest, to request Duff & Phelps to perform the procedures on one or more portfolio companies. Such instances include, but are not limited to, situations where the fair value of the investment in the portfolio company is determined to be insignificant relative to the total investment portfolio.

The total number of investments and the percentage of the investment portfolio on which the Company asked Duff & Phelps to perform such procedures are summarized below by period:


For the quarter ended:	Total companies	Percent of total investments at fair value⁽¹⁾

Large accelerated filer

Accelerated filer

Non-accelerated filer

¨ (Do not check if a smaller reporting company)

Smaller reporting company